How the U.S. downgrade will change the global economy

Standard & Poor's decision to strip the United States of its triple-A credit rating, whether we agree with it or not, signals a turning point for the entire global economy. Because of the unique role the U.S. plays in the world economy, a downgrade of the U.S. isn't anything like a downgrade of Greece or [...]

PARIS — Standard & Poor’s cut France’s sovereign credit rating on Friday by one notch to AA from AA+, giving a thumbs-down to President Francois Hollande’s efforts to put the eurozone’s second largest economy back on track.
All three major rating agencies had already stripped France of its top-grade triple-A status. But S&P was the first to downgrade it for a second time, warning that the economic reforms of the past year were not sufficient to lift growth.

Moody's took away the UK's triple A rating late Friday. A ratings downgrade has long been rumored, and although the timing is always surprising, the move itself has long been anticipated. Sterling slumped on the news in thin dealings, losing a cent in about 30 minutes.

European markets responded calmly to Standard & Poor's decision to cut the credit ratings of a number of euro countries as France managed to tap bond market investors Monday despite the loss of its cherished triple-A rating.

Given the size of the US economy and the preeminent role of the dollar worldwide, the cut to Washington's credit rating ought to spill over throughout the global economy.But for the same reason -- that the dollar and US debt are so widely held and relied on in finance and trade -- many analysts think the impact will not be too heavy, at least in the short run.Standard & Poor's cut the US's top-rank triple-A rating down a notch, to AA+, for the first time ever on Friday, technically signaling that the country's reliability for paying its debts had decreased.